February 07, 2008

NY Appeals Court Upholds Vicarious Liability Repeal

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In a major victory for the vehicle renting and leasing industry, a New York appellate court has upheld the Graves Amendment as constitutional and valid.

Today’s decision re-affirms the federal law prohibiting states from imposing vicarious liability on owners of rented and leased vehicles.

In reversing the September 11, 2006 trial court decision in Graham v Dunkley, the Appellate Division of the New York Supreme Court declares unequivocally that “actions against rental and leasing companies based solely on vicarious liability may no longer be maintained.”

The National Vehicle Leasing Association (NVLA) and the Truck Rental and Leasing Association (TRALA) led a coalition of industry allies in successfully seeking the enactment of federal legislation eliminating vicarious liability nationwide.

The legislation, known as the Graves Amendment, was signed into law on August 10, 2005.

Since enactment, most state and federal court decisions in New York, Florida, Connecticut, Maine and Georgia have upheld the authority of the law. The New York Supreme Court, Queens County, was one of the few courts to question the statute’s constitutionality.

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